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Comment 3 for Public Meeting to Discuss Universities, Legacy Contracts, and 'But For CHP' under the Cap-and-Trade Program (may1-unilegbutfor-ws) - 1st Workshop.
First Name: Gail
Last Name: Welch
Email Address: gwelch@qualcomm.com
Affiliation: Qualcomm Inc
Subject: Comments from Workshop on "But For" CHP
Comment:
Qualcomm’s Comments to CARB Proposed Adjustments to the Cap-and-Trade Program’s Treatment of “But For” CHP –May 1, 2013 CARB Workshop, Byron Sher Auditorium, Sacramento, CA Qualcomm thanks the California Air Resources Board (CARB) for this opportunity to comment on its Proposed Adjustments to the Cap-and-Trade Program’s Treatment of “But For” CHP. Qualcomm has a strong track record in energy efficiency and has helped the state meet its clean energy goals as an early adopter of Combined Heat and Power (CHP) since 1995. Our CHP processes utilize natural gas, which in turn generates electricity for our on-site usage and also generates waste heat which is further processed through our absorption chillers to provide industrial cooling water (for air conditioning of our labs, offices and data centers), as well as domestic hot water. We have taken early action in purchasing 20 percent renewable power for our San Diego facilities under the State’s Renewable Portfolio Standard (RPS) program, well ahead of our local utility company’s timeline for meeting those renewable objectives. QUALCOMM seeks to be treated on a level playing field with other entities who have received allowances and transitional assistance to help the state meet its cap-and-trade implementation goals. Below are Qualcomm’s comments on the CARB Proposed Adjustments to the Cap-and-Trade Program’s Treatment of “But For” CHP. 1) Application to CARB to be classified as a “But For” Facility. Qualcomm already reports the data that CARB requires in the CAL E-GGRT Reporting Tool, namely fuel usage, useful thermal output and electricity production. Therefore, CARB already has the relevant information to determine that our company meets the requirements of a “But For” facility. Additionally, this information has already by verified by an independent, third party, CARB-approved verifier. Requiring the “But For” facility to go through a separate process to submit the same data only prolongs the process and is unnecessary, particularly given the limited number of entities that would qualify under “But For” CHP. Furthermore, having the company apply for an exemption pushes the date for Qualcomm’s exemption past October, when the Board will adopt the regulations. 2) Useful Thermal Output terminology (versus steam). The use of the term “steam” throughout CARB’s proposal needs to be replaced with “useful thermal output.” In addition to generating electricity, Qualcomm’s CHP systems also generate waste heat, which is not steam. The appropriate wording to describe this heat generated would be “useful thermal output,” as identified by the Federal Energy Regulatory Commission (FERC) mandated annual report that CHP facilities submit to their utility company (attached). Additionally, the metric that CARB is using for their proposed methodology for the “But For” Exemption addresses only steam emissions (i.e. 0.06244 * MMBtu steam output). This needs to be amended to reflect all useful thermal output MMBtu (including waste heat, which applies to Qualcomm). 3) Need to ensure there is no double dipping. Because Qualcomm both generates a significant portion of its electricity and purchases a significant portion of its electricity, we receive invoices from both the utility (for the transportation and distribution of the commodity) and from our third party providers (for the natural gas commodity and the electricity commodity). The process of paying for implementation costs of cap and trade and the allowance costs that are passed through to users like Qualcomm must ensure that there is transparency in identifying exactly who is responsible for obtaining the allowances and how that allowance cost is passed through. There should be no double dipping of costs. Likewise, the awarded allowances to the utilities should clearly identify how those benefits are passed through to all users. If it is in the commodity cost (instead of the transportation and distribution cost component), then those who purchase the commodity from a third party provider receive no benefit, while others who purchase the commodity from the utility company would receive the benefit. CARB should seek to create an equal playing field in this regard. 4) 2nd Compliance period transition assistance is needed. “But For” CHP users need to be on a level playing field with other entities that have received allowances beyond 2015; otherwise we will be paying more per kilowatt hour to generate electricity than we would if we were to buy the same electricity from the grid. The utilities have received allowances for 2015 and beyond for their electricity generation, which helps reduce their cost of generating that kilowatt hour. Without transition assistance beyond 2015, “But For” CHP entities are at a disadvantage for the cost of producing a kilowatt hour of electricity. It does not make sense for big electricity generation entities to get transitional assistance while the smaller generation facilities who have been early adopters of energy efficiency and renewable energy, and helped the State meet its energy goals, receive none. 5) Early action recognition is missing. Qualcomm not only generates its own electricity but purchases a significant portion of its electricity commodity requirements as well. For many years, Qualcomm has obtained its purchased electricity commodity from a third party provider under the State’s “Direct Access” program. From the start, Qualcomm has complied with the State’s RPS requirements, and we took early action to meet the RPS requirement of 20 percent Renewable Energy by January 1, 2010 – meeting it long before our utility company was able to. As a result, we have been paying more for each kilowatt hour of our electricity. Qualcomm’s early action in being proactive on CHP and in helping the State meets its RPS requirements has not been recognized, while others who simply purchased offsets while continuing to emit higher levels of greenhouse gases are getting an early action benefit. Again, this penalizes Qualcomm’s early efforts to help the state meet its energy objectives. End of Comments – See attached Utility “FERC” form.
Attachment: www.arb.ca.gov/lists/com-attach/5-may1-unilegbutfor-ws-AGJSOFw8VWgGa1cI.pdf
Original File Name: Blank FERC.pdf
Date and Time Comment Was Submitted: 2013-05-20 09:27:03
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